Relational capital and supply chain collaboration for radical and incremental innovation

Abstract

Purpose The purpose of this paper is to investigate the relationship between relational capital and supply chain collaboration (SCC) and how this relationship relates to innovation. The authors propose a theoretical framework to illustrate the effect of relational capital on three dimensions of collaboration and radical and incremental innovation. Design/methodology/approach The paper has a quantitative approach. The authors conducted the survey to collect the data from 225 suppliers in the Hunan province of China. The proposed model is tested with exploratory factor analysis, confirmatory factor analysis and structural equation modelling. Findings The findings show that relational capital can facilitate information sharing and benefit/risk sharing when firms work together to achieve innovation. Furthermore, the results indicate that relational capital leads to radical innovation through facilitating information sharing among firms and helps in generating incremental innovation by encouraging firms to share risks and benefits with their partners. Practical implications The findings of this study give some suggestions for managers of the firms in terms of building their collaborative strategies. Managers should exploit relational capital to build successful and long-term collaboration. Also, through relational capital, managers can share information to create radical innovation or pool risks and share benefits with their customers to achieve incremental innovation. Originality/value This study provides a nuanced understanding of the relationship between relational capital, different dimensions of SCC and innovation in the context of a developing economy. Moreover, the findings provide a clearer understanding of the collaborative mechanism of relational capital and collaboration to achieve radical and incremental innovation.

Investigating the impact of social capital on SC resilience and SC performance

“…According to social capital theory, social capital is considered as the value of SC networks which plays an important role in explaining the nature of connection and cooperation among firms [7,9]. Literature indicates that social capital between firms can be considered as a hedge asset spurring collectivism in the SC to against sudden disruptions and improving SC performance [22,19]. It is also used to manage the conflict between partners.…”

Investigating the effect of social capital sub-dimensions on supply chain collaboration

“…Thus, scholars have emphasized the position of knowledge and information in SC relationship. They indicate that SC partners can share relevant market information, accessibility of resources, the position of operation and innovation in an ap-propriate time through relational systems [29,26]. Information sharing about market environment, forecasting, planning, customers, and competitors can help firms to face with market and demand uncertainty [2].…”

“…: structural capital (SSC), relational capital (RSC), and cognitive capital (CSC). Different nature and characteristics of these dimensions can create different effects on SC collaborative [29].…”

“…Trust is viewed as a main component of relational capital [27]. Friendship, respect, and reciprocity are built by frequent and repeated interaction and transactions in long-term [29].…”

“…When suppliers and buyers understand and share the same vision, goals and objectives, trust and friendship can be built [11]. It is because common goals and belief may bring and keep firms together, support the agreement in mutual benefits, and reduce opportunistic [29]. Previous studies also suggest that shared common goals and value can reduce misunderstanding and develop mutual trust among firms [6].…”